Exhibit (c)(12)
1999 AMENDMENT TO THE
EMPLOYMENT AGREEMENT
BETWEEN C. XXXXXXX XXXXXX AND XXXXXXXXX'X, INC.
This amendment to Employment Agreement (the "Agreement") between C. Xxxxxxx
Xxxxxx (the "Executive") and Xxxxxxxxx'x, Inc. and Xxxxxxxxx Management
Corporation (together the "Company"), which is set forth in letters dated
September 1 and December 9, 1994, February 15, 1995 and December 5, 1997, is
entered into as of the 3rd day of February, 1999:
WHEREAS, the extremely high level of mergers and acquisitions activity in
the United States and circumstances affecting the Company and its industry have
created the possibility that it could receive one or more inquiries or proposals
looking toward a possible acquisition or business combination, notwithstanding
the existing resolution of the Board of Directors that the Company is not for
sale; and
WHEREAS, the Executive's compensation and benefit arrangements with the
Company are such that if an acquisition or business combination were to occur
during 1999 there could be a loss to him of substantial value which would
otherwise be realized in the absence of such a transaction; and
WHEREAS, the Board of Directors has determined that it is in the best
interests of the Company and its stockholders to ensure that the Executive's
financial interests are aligned with those of the stockholders in the event of
an acquisition or business combination;
NOW THEREFORE, in consideration of the mutual agreements herein set forth,
and for other good and valuable consideration, the adequacy of which is hereby
acknowledged, the Company and the Executive do hereby agree to add a new
provision to the Agreement, reading in its entirety as follows:
CHANGE IN CONTROL IN 1999
Sections 1.02 through 1.07, below, shall apply if a Change in Control
(as defined in Section 1.02 below) occurs during 1999, notwithstanding any other
provision of the Agreement to the contrary. If a Change in Control does not
occur during 1999, such provisions (Sections 1.02 through 1.07) shall
automatically be cancelled and of no further force or effect without further
action on the part of either you or the Company. Sections 1.01 and 1.08 shall
apply whether or not there is a Change in Control during 1999.
Section 1.01 Duties in Connection with a Change in Control. In the
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event the Executive becomes aware of any credible, legitimate, inquiry or
proposal looking to a transaction involving the Company which would constitute a
Change in Control, Executive shall promptly report the same to the Board of
Directors of the Company and shall, to the extent requested by the Board of
Directors, participate in any exchange of information, negotiations or
discussions concerning such potential transaction. In connection therewith,
Executive shall, as requested by
the Board of Directors, assist the Company's financial advisor in preparing an
offering memorandum or other materials, participate in presentations and "due-
diligence" meetings with other parties; use his best efforts to achieve the
cooperation and continued support of other members of management and employees
of the Company in the process; and provide leadership and assistance in
successfully consummating any transaction which may be agreed upon and approved
by the Board of Directors. All actions by the Executive in connection with any
such process shall be consistent with the procedures and strategy developed by
the Company and its financial advisor.
Section 1.02 Definition of Change in Control. As used herein, the
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term "Change in Control" shall have the meaning set forth in section (B) of
Appendix B to the letter dated December 9, 1994 from Xxxx X. Xxxxxxxxx to the
Executive, as amended, except that each of subparagraphs (3) and (4) thereof
shall be amended by adding, in the first line, the words "and the subsequent
completion of" after the words "approval by the stockholders of the Company."
Section 1.03 Notice of Termination. Executive agrees that during
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the pendency of any negotiations or transaction during 1999 looking to, or which
would result in, a Change in Control, and for a period of one year following the
date of a Change in Control resulting therefrom, in addition to any other
requirements of the Agreement, the Executive shall provide the Company not less
than 120 days advance notice of his voluntary termination. Compliance with this
Section 1.03 shall be a condition precedent to Executive's right to benefits
provided in Sections 1.04, 1.05 and 1.06 below.
Section 1.04 Supplemental Retirement Income Plan. The Executive's
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Benefit under Section 4.1 of the Company's Supplemental Retirement Income Plan
(the "Retirement Plan") shall be fifty-two and one-half percent (52.5%) of his
Final Average Monthly Compensation and such Benefit shall be fully Vested,
effective upon the date of the Change in Control, notwithstanding any provision
of the Retirement Plan to the contrary. The terms "Benefit", "Final Average
Monthly Compensation" and "Vested" shall have the meanings set forth in the
Retirement Plan. The Retirement Plan shall automatically be amended to reflect
this change upon the date of the Change in Control, without further action of
the Company or the Executive.
Section 1.05 Termination Following Change in Control. Any
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limitations, whether contained in the Agreement or any other plan or program of
the Company, which limit payments to Executive to the maximum amount which the
Company shall be entitled to deduct as a compensation expense on its federal
income tax return shall not be applicable, and the Executive shall be entitled
to receive all payments and benefits which would otherwise be payable if there
were no such limitations. In addition, the definition of "Termination Period"
in Appendix B to the letter dated December 9, 1994 from Xxxx X. Xxxxxxxxx to the
Executive shall be amended by changing "one year" in paragraph E to "two years".
Section 1.06 Gross-Up Payments for Excise Taxes. This Section 1.06
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shall be applicable if there is a Change in Control and the Executive is
entitled to compensation pursuant to Section III of the letter dated December 9,
1994 from Xxxx X. Xxxxxxxxx to the Executive, as amended, as a result of
termination of his employment during the Termination Period (as therein
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defined) other than by reason of a Nonqualifying Termination (as so defined). In
the event that the payments or benefits provided for in the Agreement or
otherwise payable to the Executive (either before or after the date hereof)
constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") and will be subject to
the excise tax imposed by Section 4999 of the Code, then the Executive shall
receive (i) a payment from the Company sufficient to pay such excise tax, and
(ii) an additional payment from the Company sufficient to pay the excise tax and
all taxes (including, but not limited to, federal and state income and
employment taxes) arising from the payments made by the Company to the Executive
pursuant to this sentence. Unless the Company and Executive otherwise agree in
writing, the determination of Executive's excise tax liability shall be made in
writing by one of the five largest accounting firms in the United States which
is mutually acceptable to the Company and Executive (the "Accountants"). For
purposes of making the calculations required by this Section, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. The Company and Executive
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
Section. The Company shall bear all fees and costs the Accountants may
reasonably charge or incur in connection with any calculations contemplated by
this Section. The Company further agrees that, if at any time it is determined
by the appropriate tax authority that a greater excise tax liability is due than
the amount which is determined by the Accountants, the Executive shall receive a
further payment from the Company sufficient to pay such additional excise tax
liability and all taxes (including, but not limited to, federal and state income
and employment taxes) arising from such further payment.
Section 1.07 Agreement Not to Compete. Executive Agrees that if
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there is a Change in Control during 1999, and if during the two year period
thereafter the Executive shall voluntarily terminate his employment with the
Company, other than for Good Reason (as defined in the Agreement), then for a
period of one year following such termination the Executive shall not engage in
any activities, whether as employer, proprietor, partner, stockholder (other
than the holder of less than 5% of the stock of a corporation, the securities of
which are traded on a national securities exchange or the NASDAQ National Market
System), director, officer, employee or otherwise, in competition with (1) the
businesses conducted at the date hereof by the Company or (2) any business in
which the Company is substantially engaged at the time of the Change in Control.
Section 1.08 Payment of Professional Fees. The Company shall pay the
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reasonable professional fees incurred by the Executive in connection with this
amendment to his employment agreement and related matters.
This Amendment shall at all times be construed, interpreted and
enforced in accordance with the laws of the State of Delaware, notwithstanding
that the laws of any other jurisdiction may be applicable to the Agreement.
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IN WITNESS WHEREOF, the Executive and the undersigned duly authorized
officer of the Company have executed and delivered this amendment as of the date
set forth in the first paragraph above.
XXXXXXXXX'X, INC.
By: /s/ Xxxxx X. Xxxxx
_______________________________
Xxxxx X. Xxxxx
President and Chief Executive Officer
XXXXXXXXX MANAGEMENT CORPORATION
By: /s/ Xxxxx X. Xxxxx
_______________________________
Xxxxx X. Xxxxx
President and Chief Executive Officer
C. Xxxxxxx Xxxxxx
/s/ C. Xxxxxxx Xxxxxx
__________________________________
C. Xxxxxxx Xxxxxx
LC990220.034/8+
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